Crypto exchange hacks are nearly as old as crypto exchanges themselves. As long as there are holes in an exchange’s defenses to exploit, bad actors will continue to exploit those weaknesses for a profit. Some hacks see huge amounts of money taken, while others only see small losses. The Bitfinex hack of 2016 wasn’t small by any means; hackers ended up taking off with $60 million in assets. Now, six years since the hack first took place, that stolen bag is worth billions. And many crypto investors believed the hackers to have gotten away with it. However, a pair of arrests today suggest otherwise.
Bitfinex is one of the older crypto exchanges, founded in Hong Kong in 2012. It was developed by iFinex Inc., the company also behind the stablecoin Tether (CCC:USDT-USD). Nowadays, the exchange is known as one of the largest platforms for trading digital assets; Bitfinex is the eighth-largest exchange in the world by trading volume, seeing about $1 billion in assets traded each day.
In 2016, the exchange fell victim to a robbery in which a pair of hackers made off with $60 million worth of Bitcoin (CCC:BTC-USD). Now, six years after the fact, that bag has inflated in value to $4.5 billion. Since then, authorities have been on a wild goose chase trying to track down the stolen assets. Luckily for them, it seems that the chase is coming to an end.
Bitfinex Gets Revenge as Hackers Are Caught Laundering Bitcoin
Today, Bitfinex is getting the last laugh. The U.S. Department of Justice has made a pair of arrests linked to the hack of the platform, and it has a lengthy list of charges against the hackers.
Ilya Lichtenstein and Heather Morgan, two New York City residents, have been arrested today in connection to the 2016 hack. The couple is due for their first appearance in court this afternoon — the first of what is sure to be a plethora of courtroom meetings.
Things began seriously heating up around the case last week. Authorities revealed they had been closely tracking the movements of the assets. They were able to, through this tracking, seize $3.5 billion worth of Bitcoin that was being moved across 23 different transactions.
With the couple now at the mercy of the justice system, they will have to prove their innocence against a long list of complaints by the Justice Department. Mainly, the body accuses the couple of intent to launder stolen funds and to defraud the United States. Specifically, it accuses Lichtenstein and Morgan of using fake identities to open accounts and automating transactions. It also accuses the pair of chain-hopping and mixing the stolen funds across multiple accounts and exchanges.
The news is a big win for American law enforcement. It shows that they are legitimately capable of tracking stolen funds, even against measures to launder them. The implications of the arrest are far reaching when it comes to incoming regulations to crypto trading and reporting as well.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
